The commerce minister has rejected a demand by cement manufacturers for stakeholder consultation before a bill aimed at regulating cement prices is tabled in Parliament.
Speaking on JoyNews’ PM Express, Kobina Tahir Hammond said manufacturers were not consulted while drafting the LI but they have been consistently discussing with them the need for transparency in pricing.
He told host Evans Mensah that he had appealed to cement manufacturers to self-regulate to prevent prices from skyrocketing, but his requests had fallen on deaf ears.
“I did not have to consult them in drafting the LI and I consistently warned them that they could not do what they were doing. [raising prices]I met with them in my office several times and expressed my wishes: I wanted transparency, I wanted cuts, I wanted them to understand the rationale and publication.”
“Get this information and let me know. They have told me I cannot do it. I have argued endlessly about this simple issue of price publication and self-regulation. It has reached a stage where something has to be done and what I have to do within the law is to approach Parliament,” the trade minister said.
KT Hammond argues that the proposed LI will encourage cement manufacturers to make their production costs and other necessary information transparent, which will help in setting a price cap in favour of cement manufacturers and consumers.
“The reality is very clear, the cedi has not been doing very well recently and I accept there are problems, but just like the oil sector is regulated by the NPA, let’s understand the mechanism of pricing so everyone knows the basics.”
“The price cap will be decided after taking into account all relevant factors. They will have to be transparent, meet with the committee and explain what their losses will be compared to other companies,” he added.
He believes that the LI is necessary to prevent cement manufacturers from exploiting the people, hence the committee set up will discuss all the finer points like cost of production, profit margins and depreciation of the cedi to finalise the price.
This comes after the Cement Manufacturers Association petitioned Parliament to reject the proposed LI in its entirety.
COCMAG urged Parliament to reject the proposal, saying it was submitted without prior consultation with key stakeholders in the cement industry, including manufacturers.
Submitting the proposal without necessary consultations undermines the principles of fairness, transparency and inclusive decision-making, they noted.
“We believe that the issues leading to the rise in cement prices are complex and multifaceted, and are primarily driven by the rapid and consistent depreciation of the Ghanaian cedi against the US dollar.”
“Addressing these challenges requires comprehensive understanding and collaboration from all parties, including the Ministry of Trade and Industry, cement manufacturers and other stakeholders.”
“The Minister’s attempt to unilaterally introduce this proposal into Parliament without consulting us is not only unfair, but also detrimental to the spirit of cooperation and mutual respect that should guide our joint efforts towards the stability and growth of our industry,” the letter said.
background
In May 2024, Minister of Trade and Industry K.T. Hammond instructed the Cement Manufacturing Development Commission (CMDC) to immediately reverse the price increases to Ghanaian cement manufacturers.
However, the Cement Manufacturers Association (CMA) rejected the directive as “without basis or justification”, citing production costs and free market economic principles, and refused to comply.
On June 25, the Minister of Trade told Parliament:Ghana Standards Association Cement Price Regulation 2024‘ and gained legal backing, but faced stiff opposition in Congress.
NDC lawmakers have demanded that the Legislative Instrument (LI) undergo pre-filing procedures before it can be formally tabled in Parliament.
LI is
Manufacturers of cement products could face up to three years in prison if they ignore certain provisions of Trade Secretary KT Hammond’s proposed Legislative Measures (LI).
Evans-Mensah told Emefa Apaw on Newsnight that the document “sets the maximum retail price of cement, the price above which no manufacturer can sell cement”.
Evans-Mensah explained that the proposed bill “in effect proposes severe penalties, including up to three years imprisonment, for any manufacturer who breaches the terms of the LI.”
The document spells out exactly who will be penalized if the rules are broken.
“It speaks to the fact that in the case of a corporation, all directors and officers of that corporation will be deemed to have committed that offence.
“In other words, if they breach this and sell above the price cap, if convicted, the directors of that company, the officers of that legal entity will be sent to prison, facing up to three years in prison.”
“And in the case of a company or partnership, every partner in the company or partnership, or any other person involved in the management of the company, will be deemed to have committed that offence,” he says.
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